CapitaCommercial Trust Management Limited, manager of CapitaCommercial Trust (CCT), has announced that its distributable income rose 11.3 percent to S$221 million in the fiscal year ended 31 December 2010, while estimated distribution per unit (DPU) in FY2010 increased 10.9 percent year-on-year to 7.83 cents, from 7.06 cents in 2009.
“This year, the Trust delivered a credible growth in distributable income and distribution per unit of 7.83 cents. It has benefited from higher rents and occupancies at its properties, primarily due to proactive leasing. We have also done well in managing the interest cost and operating expenses of the properties. During the year, all the Trust’s refinancing due in 2010 was completed well ahead of maturities,” said Mr. Richard Hale, Chairman of the Manager.
Meanwhile, DPU in the second half of 2010 also rose 5.4 percent to 3.93 cents over the same period in 2009, while DPU in Q4 ended 31 December 2010 was 1.94 cents, up 3.2 percent over the same period in 2009.
Independent valuation records showed that values of CCT’s investment properties as of 31 December 2010 reached S$5,475.4 million, which translates to around S$227.8 million in net fair value gain, excluding the Starhub Centre, which was disposed on September 16. CCT’s total asset size as of end-December 2010 hit S$6.2 billion.
As part of the trust’s portfolio reconstitution strategy to unlock the value of assets that have reached the optimal stage of their life cycles, Mr. Hale said that CCT “has divested two non-Grade A office buildings with significant capital gains”.
“Other initiatives included the asset enhancement plan to reposition Six Battery Road, a Grade A office building, to capture the office market recovery. The building is the first operating office building in Singapore to be conferred with a Green Mark Platinum award by the Building and Construction Authority (BCA).”
“We further strengthened the Trust’s financial flexibility by lowering its gearing ratio to 28.6% from 31.5%. We also prepaid a secured term loan of S$142.6 million due in 2012. With a strong balance sheet, we are actively evaluating investment opportunities this year,” he added.
Looking forward, around 60 percent of the new Grade A office supply, expected to be completed this year, has already been preleased. The trust will see moderate rental growth this year, given that new office supply will decline from 2012 and global economic recovery will spur office demand.